Democracy Now!: Gov’t Audit Criticizes Handing of AIG Bailout

A new government audit has found that the Federal Reserve Bank of New York mismanaged the $85 billion bailout of AIG by refusing to use its considerable leverage to wring concessions from AIG’s trading partners. This resulted in the New York Fed paying full market value for assets underlying credit default swaps written by AIG to Goldman Sachs and other banks. This was done even though at least one bank, UBS, offered to cancel the contracts for less.

~ by wheresthemic on November 17, 2009.

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